Payday Loans

In: Business and Management

Submitted By chirisam90
Words 748
Pages 3
A payday loan is also known as a cash advance loan. It is a short term loan, which can be obtained for emergency purposes. In order to acquire the loan, one has to have; proof of income, a photo and the pay stubs.

A payday loan is a short term loan, that can be obtained by a person who is faced with an emergency that requires immediate cash. The loan is also referred to as a cash advance loan. In most occasions, there are a few prerequisites while applying for this loan. These include: a proof of income, photo recognition and the previous pay stubs.

Borrowing this loan needs a personal check that is post dated to be written to the lenders of the payday loan. Basically, the exact terms of the loan are evident in the relevant legal documents being presented by the lender. This indicates the annual interest rates late fees and financial charges.

Usually, the date in which this loan is due is similar to the date of the borrower's paycheck. Moreover, this loan is flexible and can allow the borrower to extend the terms of the loan when he or she is unable to meet the payment on the due date. This loan is an excellent option for immediate cash; however, the borrower should have the capacity to repay the loan when the date is due.

Payday loans feature late charges and high interest rates. This implies that, the interest accrued may equal and even at times exceed the principle amount borrowed. This may be as a result of unregulated interest rates since the loans are from private cash lenders. While considering obtaining a payday loan, the individuals should borrow reasonable amounts that their paychecks can conveniently repay.

It is also wise to take this loan when there is no other financial alternative and the money is very urgent. Such conditions may be in the events of; accident, disasters, catastrophes and unforeseeable financial emergencies. Prior an…...

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